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Introduction
In the past three decades, customer loyalty has been empirically and anecdotally linked to business performance and sustainability (Hasiri and Afghanpour, 2016; Leninkumar, 2017; Ofori et al., 2017). For this reason, investigations into the nature and drivers of customer loyalty have been gaining increasing attention in the field of marketing and customer relations by academics and practitioners (Ofori et al., 2017). The improvement in our understanding of the linkage between customer loyalty and corporate profitability has resulted in a shift from the conventional transactional one-off interactions between organizations and their customers to a long-term relationship.
Academics and marketing professionals have come to realize that maintaining long-term relationship with customers and the key internal and external stakeholder groups of a business should be a major focus of management (Stan et al., 2013). Maintaining customer loyalty is more important than a narrow focus on the one-off transactional demand for a company’s product or service. The goal of a business is to ensure that beyond the initial transaction, the customer has a good experience and continues to perceive the company/service provider, and by extension its products and services in a positive post-transaction perspective (Narteh and Kuada, 2014; Tweneboah-Koduah and Farley, 2015). When a customer has a positive perception of a service provider, the customer will likely spread favorable views about the quality of service delivered by the company, thus increasing the market potential of the company. Moreover, various researchers have demonstrated that the cost of acquiring a new customer is 5 times more expensive than retaining an existing customer, and 50–100 times more expensive to win back a lost customer (Ofori et al., 2017). Therefore, it is important for companies to understand the needs of their customers and aim to build a relationship around those needs to promote long-term customer loyalty and profitability.
In recent times, the Ghanaian banking sector has witnessed increased competition, especially given regulatory reforms that have opened the Ghanaian banking space to international players. With the realization that product and service innovation are not sufficient to drive profitability, banks are now focusing on customer retention strategies to drive long-term profitability and sustainability.
The objective of this paper is to investigate empirically the factors that influence customer loyalty in the...